|New Keynesian economics|
January 4, 1961 |
|Institution||Universitat Pompeu Fabra (2001–)
Barcelona Graduate School of Economics (2006–)
New York University (1994–01)
Columbia University (1989–94)
|Alma mater||MIT (Ph.D. 1989)|
|Awards||Yrjö Jahnsson Award (2005)|
|Information at IDEAS/RePEc|
Jordi Galí (born January 4, 1961) is a Spanish macroeconomist who is regarded as one of the main figures in New Keynesian macroeconomics today. He is currently the director of the Centre de Recerca en Economia Internacional (CREI, the Center for Research in International Economics) at Universitat Pompeu Fabra and a Research Professor at the Barcelona Graduate School of Economics. After obtaining his doctorate from MIT in 1989 under the supervision of Olivier Blanchard, he held faculty positions at Columbia University and New York University before moving to Barcelona.
Galí's research centers on the causes of business cycles and on optimal monetary policy, especially through the lens of time series analysis. His studies with Richard Clarida and Mark Gertler suggest that monetary policy in many countries today resembles the Taylor rule, whereas the policy makers of the 1970s failed to follow the Taylor rule.
Another theme of Galí's research is how central banks should set interest rates. In some of the simplest New Keynesian macroeconomic models, stabilizing the inflation rate stabilizes the output gap too. If this property were roughly true in reality, it would permit central bankers to pursue a simplified Taylor rule focused only on inflation stabilization, with no need to consider output growth. Jordi Galí and Olivier Blanchard have called this property the 'divine coincidence', and have argued that in more realistic models which include additional frictions, it no longer holds. Instead, models with additional frictions (such as frictional unemployment) imply a tradeoff between stabilizing inflation and stabilizing the output gap.
Galí is perhaps best known for providing time series evidence that improvements in labour productivity cause employment to decrease. This finding contradicts the predictions of some well-known real business cycle models promoted by the New Classical macroeconomic school, but is (according to Galí) consistent with many New Keynesian models. However, the statistical methods ('structural vector autoregressions') on which this finding is based remain controversial.
In 2008, Princeton University Press published Galí's monograph Monetary Policy, Inflation, and the Business Cycle. The book provides an introduction to New Keynesian DSGE models, and analyzes the implications of those models for monetary policy. It is written at a level intended for introductory graduate courses in macroeconomics.
In 2005, Galí received the Yrjö Jahnsson Award of the European Economic Association in recognition of his work on New Keynesian macroeconomics. He shared the prize with Timothy Besley of the London School of Economics. Thomson Reuters lists him among the 'citation laureates' who are likely future winners of the Nobel Prize in Economics.
- Galí, Jordi (1994), 'Keeping up with the Joneses: consumption externalities, portfolio choice, and asset prices'. Journal of Money, Credit, and Banking 26 (1), pp. 1-8.
- Clarida, Richard; Mark Gertler; and Jordi Galí (2000), 'Monetary policy rules and macroeconomic stability: theory and some evidence.' Quarterly Journal of Economics 115. pp. 147-180.
- Clarida, Richard; Mark Gertler; and Jordi Galí (1998), 'Monetary policy rules in practice: some international evidence.' European Economic Review 42 (6), pp. 1033-67.
- Goodfriend, Marvin, and Robert G. King (1997), 'The New Neoclassical Synthesis and the role of monetary policy'. NBER Macroeconomics Annual 12 (1).
- Comments by N. Gregory Mankiw on the 'divine coincidence'.
- Blanchard, Olivier, and Jordi Galí (2007), 'Real wage rigidities and the New Keynesian model'. Journal of Money, Credit, and Banking 39 (supplement 1), pp. 35-65.
- Galí, Jordi (1999), 'Technology, employment, and the business cycle: Do technology shocks explain aggregate fluctuations?' American Economic Review 89 (1), pp. 249-71.
- Thomas F. Cooley and Mark Dwyer (1998), 'Business Cycle Analysis Without Much Theory: A Look at Structural VARs'. Journal of Econometrics 83, pp. 57-88.
- Jon Faust and Eric M. Leeper (1997), 'When Do Long-Run Identifying Restrictions Give Reliable Results?' Journal of Business and Economic Statistics 15 (3), pp. 345-53.
- V.V. Chari, Patrick J. Kehoe, and Ellen McGrattan (2007), Are Structural VARs with Long-Run Restrictions Useful in Developing Business Cycle Theory? Federal Reserve Bank of Minneapolis Staff Report #364.
- Thomson-Reuters list of 'citation laureates' in economics
- Galí's website at the Centre de Recerca en Economia Internacional
- Jordi Galí's Barcelona GSE faculty profile
- Barcelona GSE Research Professors